Energy Relations with Russia and Gas Market Liberalization JONAS GRÄTZ Russian Energy Policy: Challenges for the EU Current Russian energy policy is based on the conception of oil and gas resources as strategic goods. This entails a reliance on the direct influence of state actors rather than on market forces to regulate their extraction and distribution. This has been a common trend in oil and gas exporting countries since the 1970s, but Russia is unique in that no other hydrocar­bon exporter considers itself to be a»great power.« Increasing state influ­ence and regulation by legislative manipulation can be seen, on the one hand, as a deliberate policy enabling the state to use oil and gas corpora­tions, especially Gazprom and Rosneft’, as both domestic and foreign­policy tools in the absence of other amenable instruments(for example, ideological or institutional), and on the other hand, as the result of spon­taneous processes of property redistribution to the administration, espe­cially the security services. In the gas sector, recent changes in the relevant laws consolidated the positions of majority state-owned companies, most notably Gazprom. Gazprom obtained not only a monopoly on all gas exports, but also the legal right to be awarded certain exploration licenses without competi­tion from the state. Thus, competition is absent and foreign ownership contingent on the decisions of the monopolist and of political actors. In an effort to control interdependencies politically, many foreign oil com­panies with controlling stakes in oil or gas exploration have been forced to leave the country or to reduce their stakes to below 25 percent. The expropriation of Yukos(one of the world’s largest non-state oil compa­nies) stands out as the most visible example of arbitrary state action, ben­efiting only a narrow elite. Meanwhile, the increasing reliance on state companies has led to a deinstitutionalization of the oil and gas sector, which is now managed primarily in accordance with»state interests,« that is, the vested interests of the federal politico-economic elite in rent capture and political control. 66 Grätz, Energy Relations with Russia ipg 3/2009